The molecular mechanism whereby GABAergic transmission is modifed by benzodiazepines (BDZs) was studied in vivo and in vitro. In vivo BZDs like the GABA mimetic muscimol antagonize the isoniazid-induced convulsions, and the isoniazid-induced increase of cerebellar cGMP and pituitary cAMP content. In vitro BDZs facilitate binding of GABA to its receptor sites by competing with the endogenous membrane protein (GABA-modulin) which acts as an inhibitor of high affinity Na ion-independent GABA binding to synaptic membrane preparations. GABA-modulin competes with BDZs for their specific receptor sites. GABA, benzodiazepine receptors and GABA-modulin are present in the membranes of a neuroblastoma cell line. In these cells stimulation of GABA receptor increases Cl-influx and BDZs facilitate the action of GABA. This increase in the binding affinity of GABA for its postsynaptic site may represent the molecular mechanism by which BDZs facilitate GABAergic transmission in vivo. These observations may help in elucidating details of the supramolecular nature of postsynaptic GABA and BDZs receptors and also may offer a way to study the biochemical defects in anxiety states.